Last Word
Perspective
ARTICLE
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Fund Manager
VIDEO
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Square Mile
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Fund Buyer
REACTIONS
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strategy directly from the fund manager himself.
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research and market views together with an explanation of the
Premier Income and Premier Monthly Income are core income funds offering a higher yield compared to many similar UK equity income funds. Manager Chris White looks for companies offering high dividends and good cash flow to deliver a strong income yield.
Axis analyses the fund from four perspectives to bring you insight,
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Review By Gary Corcoran
Chris White has managed this UK equity income fund since December 2010 with an aim of paying a half-yearly income in excess of 100% of the FTSE All-Share index. He does this by investing in a concentrated number of stocks across the cap size with a strong focus on generating attractive dividends.
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“White is looking for companies with an underlying cashflow and the ability to improve that cashflow over time.”
PROFESSION_ Editorial
YEARS IN INDUSTRY_ 25+
LOCATION_ London
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GARY CORCORAN
A single UK equity income strategy that gives investors a choice of two separate income options
COMPANY_ Square Mile Investment
To view Square Mile Investment Consulting and Research Ltd's disclosure on their involvement on this site, please click here.
JOB TITLE_ Head of Research
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“This is a solid UK equity income strategy that is run by an experienced fund manager who seeks to minimise capital losses through a naturally cautious investment approach.”
There are two options of this strategy available, Income and Monthly Income, the former distributing on a bi-annual basis. Both are managed along similar lines by seasoned investor Chris White. The underlying portfolio of each fund holds between 40 and 60 stocks, with White seeking to deliver a yield in excess of the FTSE All Share index by investing across the market-cap spectrum.
Scroll down to read more...
YEARS IN INDUSTRY_ 16
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VICTORIA HASLER
Last Word
Perspective
Chris White joined Premier Asset Management in 2010 to take on the management of the long-standing Premier Income and Premier Monthly Income Funds.
They are part of the firm’s UK equity income range that also includes the Premier Optimum Income Fund, which White co-manages alongside Geoff Kirk.
The difference between the Premier Income Fund and Premier Monthly Income Fund is the frequency of the income payment, with the former being paid on a bi-annual basis.
Each fund shares the same underlying holdings, typically between 40 and 60 stocks, with White having a flexible approach within the parameters of the sector they sit in, the Investment Association’s UK Equity Income sector. As a result, he aims to provide a dividend in excess of 100% of the FTSE All-Share Index.
The funds invest across the market-cap spectrum giving White the freedom to invest where he sees the best value across the FTSE indices. Unlike some other UK equity income propositions, this is not a specialist small or large-cap UK equity income fund. Instead, White prefers to have the capability of blending different sizes of business, moving up or down the cap scale as he sees fit depending on where he sees the best value.
Premier Income is designed to be a high-dividend-yielding equity income fund, providing good dividend growth as well as capital growth - this is certainly the case when compared to similar vanilla UK equity income funds. It retains a strong emphasis on the overall dividend yield that is paid on the funds, with the sum of the investment process and White’s stock-picking skills helping Premier Income to deliver a historic yield of 4.5% for the 12 month period ended 31 January, 2018.
Within its UK equity income range, Premier Optimum Income is the firm’s UK equity enhanced income fund, with White managing the underlying UK equity portfolio and Kirk running a covered call option strategy. Premier Optimum Income Fund has two sources of income: the underlying yield on the UK equity portfolio, which is based on the Premier Income Fund portfolio,, and the option premiums which are paid as a part of the total dividend distributions. The fund has a target yield of 7% p.a.
With a multi-cap, core value, disciplined approach, the Premier Income and Premier Monthly Income Funds are designed to be the core for an investor’s UK equity income portfolio.
Premier Income and Premier Monthly Income are designed to be high-yielding equity income funds, providing dividend as well as capital growth
AUTHOR_ GARY CORCORAN
He takes a ‘core value’ approach with his investment process, looking to buy quality companies with the potential to improve at the right price, as opposed to ‘deep value’ companies. For White, the downside risk of deep value, recovery companies is too great, even if the potential returns could be significant. An equity investment cannot eliminate all risk because of the vagaries of the stock market but a great deal of thought is put into managing downside risk within the Premier Income Fund, not just realising the upside potential - the fund takes more than a ‘dividend at all costs’ approach.
With this in mind, there is a very strong focus on company valuations, paying attention to, for example, free cashflow yield with low valuations, EBITDA, the price-to-book ratio, high dividend yield with strong dividend cover and so on. This approach provides the team with a future valuation for each company, looking two to three years ahead that helps with any buy/sell/hold decision.
Not every company invested in has to pay a dividend from the outset but at the point of investment that company’s management should certainly have a clear idea about a pathway to paying a future dividend. For White the dividend is “the icing on the cake”, as what he is really looking for are companies with an underlying cash flow and the ability to improve that cash flow over time. He feels these companies are more likely to pay high and growing dividends.
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Kames Global Diversified Income Fund
Fund
Vincent McEntegart has been managing the Kames Global Diversified Income Fund for six years and is well-versed to the changeable financial climate. Curabitur blandit tempus porttitor. Aenean lacinia bibendum nulla sed consectetur.
Manager
Vincent McEntegart
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Overall, White has built a solid track record over the course of his tenure. There have been some standout years, namely 2013 and 2015, which give the longer-term cumulative numbers a nice boost. The fund’s yield has tended to remain at a premium to the market with, for example, the dividend payment increasing by 10% from the 2015/16 - 2016/17 financial years.
The ongoing charge figure (OCF) of the Income Fund’s C Inc share class is currently 90bps, which is slightly below the median of actively managed funds within the IA UK Equity Income sector. The total transaction charges are 0.37% meaning the fund’s total costs are 1.27%. We believe the fund offers investors adequate value for money.
AUTHOR_ VICTORIA HASLER
“Depending on the fund held, investors have the option of monthly or half-yearly dividend distributions. Both strategies are run along identical lines and benefit from an experienced manager who seeks to meet the fund’s objectives by investing across the market cap scale, but in a reasonably cautious fashion. Both funds’ costs are priced broadly in line with the competition.”
The funds can invest across the market cap range, including IPOs, which presents a sizeable opportunity set. While this presents a challenge over the amount of ground the manager has to cover, the team recognises this through the use of screens designed to highlight ideas that are worthy of further, more detailed analysis. Analysis is constructed internally and is supplemented by research from the sell-side community.
The final portfolios are constructed with some reference to the FTSE All-Share Index although this fund has a high active share relative to this index. The allocation to companies further down the market-cap scale is well managed using a broader range of holdings, the majority of which are held in small positions of 1% or less.
Both the Premier Monthly Income and Premier Income funds preside within the highly competitive IA UK Equity Income sector. The underlying portfolios are managed using an identical approach by experienced UK income investor, Chris White. White has been responsible for both since December 2010, on joining the group following a seven-year spell at Threadneedle Investments.
Over the past few years Premier Asset Management has attracted a number of experienced investment professionals to run a series of predominantly UK and global equity strategies. We see the broadening of the business as a sensible form of diversification given the success of their multi-asset/fund-of-funds suite, which account for a significant amount of the firm’s total assets under management.
Running these funds, White uses an approach that we think is wholly sensible for income investing. He is a naturally cautious investor who thinks as much about the potential for capital loss with each holding as he does about its potential upside. Given the focus on income, a company’s ability to pay and indeed grow its dividend is also an important aspect of the process. It is therefore worth noting that the manager does not seek to place capital at risk by chasing higher yielding but perhaps more risky and less income-reliable stocks. Preferred investments would tend to demonstrate characteristics such as higher quality business franchises, strong free cashflow yields and low levels of debt.
Two vanilla UK equity income funds using the same underlying holdings to provide a high yield
John Monaghan, research manager, Square Mile Investment Consulting & Research
Square Mile
Perspective
Fund buyers' perspective
Premier Income and Premier Monthly Income Funds have consistently delivered a historic yield of around 4-4.5% following a multi-cap size, core value strategy.
Market Reaction
Next
Jonathan Woo_ investment research_ Santander Asset Management
×
“There has been considerable structural reform in giant markets like India, China and the Pacific Tiger economies. It’s a time of change from investment in infrastructure to innovation. Baillie Gifford looks for superior growth, meaning its style is suited to this change. They make some debatable valuations but are valiant investors and can spot businesses with great fundamentals early. They are picking the sort of businesses that have the potential to steam ahead and accrue multiple years of earnings growth for investors.”
Scott Spencer_ Investment Manager_ F&C Multi-manager solutions, BMO Global Asset Management
“The key rationale behind Income Maximiser is the delivery of a 7% yield. The use of derivatives in the portfolio means the upside is therefore limited but we find the fund is a lower beta way of getting equity exposure as well as some downside protection.”
“The fund managers of Schroder Income [Nick Kirrage and Kevin Murphy] pick the stocks, and the derivatives for Income Maximiser are then written accordingly. We like the fact that derivatives provide a diversification element and we have a great deal of confidence that the derivatives are run by a separate team. It is a very different skill set and is a USP of theirs.”
Richard Philbin_ CIO_ Wellian Investment Solutions
Mona Shah_ head of collectives_ Rathbones
“After years of lacklustre performance, Asia and the emerging world experienced a resurgence last year, driven by rising commodity prices and a fundamental shift in favour of more cyclical sectors like financials, energy and materials. But many of the fortunes of Asia and emerging markets are driven by sentiment from the West, which was negatively affected by the US election in November. While markets have regained their initial losses, we’ve had no more clarity on what Donald Trump’s policies will mean with regards to global trade and protectionism. For this reason, we believe that diversification should offer benefits in a period where markets are likely to be volatile. In addition, the economies in Asia-Pacific are showing increasing dependence on domestic demand, and we believe funds exposed to growing demand from consumers in China, for example, may be better placed to withstand headwinds from the US.”
Robert Shepherd_ Director_ Bright & Co.
We were on the lookout for something different and, let’s face it, 4% or lower is the norm in this environment. So this is attractive”
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Achievable, sustainable, reliable
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Fund
Manager
Perspective
Fund Buyer
Perspective
This demo version has been optimised for desktop, laptop and tablet. Smartphones, iPhones will be supported in the next version.
to bring you insight, research and market views
together with an explanation of the strategy
directly from the fund manager himself.
Axis analyses the fund from four perspectives
He takes a ‘core value’ approach with his investment process, looking to buy quality companies with the potential to improve at the right price, as opposed to ‘deep value’ companies. For White, the downside risk of deep value, recovery companies is too great, even if the potential returns could be significant. An equity investment cannot eliminate all risk because of the vagaries of the stock market but a great deal of thought is put into managing downside risk within the Premier Income Fund, not just realising the upside potential - the fund takes more than a ‘dividend at all costs’ approach.With this in mind, there is a very strong focus on company valuations, paying attention to, for example, free cashflow yield with low valuations, EBITDA, the price-to-book ratio, high dividend yield with strong dividend cover and so on. This approach provides the team with a future valuation for each company, looking two to three years ahead that helps with any buy/sell/hold decision.
Not every company invested in has to pay a dividend from the outset but at the point of investment that company’s management should certainly have a clear idea about a pathway to paying a future dividend. For White the dividend is “the icing on the cake”, as what he is really looking for are companies with an underlying cash flow and the ability to improve that cash flow over time. He feels these companies are more likely to pay high and growing dividends.
Premier Income is designed to be a high-dividend-yielding equity income fund, providing good dividend growth as well as capital growth - this is certainly the case when compared to similar vanilla UK equity income funds. It retains a strong emphasis on the overall dividend yield that is paid on the funds, with the sum of the investment process and White’s stock-picking skills helping Premier Income to deliver a historic yield of 4.5% for the 12 month period ended 31 January, 2018.Within its UK equity income range, Premier Optimum Income is the firm’s UK equity enhanced income fund, with White managing the underlying UK equity portfolio and Kirk running a covered call option strategy. Premier Optimum Income Fund has two sources of income: the underlying yield on the UK equity portfolio, which is based on the Premier Income Fund portfolio,, and the option premiums which are paid as a part of the total dividend distributions. The fund has a target yield of 7% p.a.
With a multi-cap, core value, disciplined approach, the Premier Income and Premier Monthly Income Funds are designed to be the core for an investor’s UK equity income portfolio.
Chris White joined Premier Asset Management in 2010 to take on the management of the long-standing Premier Income and Premier Monthly Income Funds.They are part of the firm’s UK equity income range that also includes the Premier Optimum Income Fund, which White co-manages alongside Geoff Kirk.
The difference between the Premier Income Fund and Premier Monthly Income Fund is the frequency of the income payment, with the former being paid on a bi-annual basis.
Each fund shares the same underlying holdings, typically between 40 and 60 stocks, with White having a flexible approach within the parameters of the sector they sit in, the Investment Association’s UK Equity Income sector. As a result, he aims to provide a dividend in excess of 100% of the FTSE All-Share Index.
The funds invest across the market-cap spectrum giving White the freedom to invest where he sees the best value across the FTSE indices. Unlike some other UK equity income propositions, this is not a specialist small or large-cap UK equity income fund. Instead, White prefers to have the capability of blending different sizes of business, moving up or down the cap scale as he sees fit depending on where he sees the best value.
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Launch date_25/02/2014
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Kames Diversified Monthly Income Fund
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Chris White joined Premier in November 2010 and has over 25 years of investment management experience. He manages the Premier Income and Premier Monthly Income Funds and is co-manager of Premier Optimum Income Fund.
Premier Income and Monthly Income funds
Chris White
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Premium Income and Monthly Income funds
There are two options of this strategy available, Income and Monthly Income, the former distributing on a bi-annual basis. Both are managed along similar lines by seasoned investor Chris White. The underlying portfolio of each fund holds between 40 and 60 stocks, with White seeking to deliver a yield in excess of the FTSE All Share index by investing across the market-cap spectrum.Scroll down to read more...
"This is a solid UK equity income strategy that is run by an experienced fund manager who seeks to minimise capital losses through a naturally cautious investment approach."
Two vanilla UK equity income funds using the same underlying holdings to provide a high yield
John Monaghan, research manager,
Square Mile Investment Consulting & Research
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market viewpoints, together with the
to bring you incisive analysis, research and
Fund Manager’s own investment strategy.
Axis interrogates the fund from four perspectives
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Income Fund
Chris White has managed this UK equity income fund since December 2010 with an aim of paying a half-yearly income in excess of 100% of the FTSE All-Share index. He does this by investing in a concentrated number of stocks across the cap size with a strong focus on generating attractive dividends.
Review By Gary Corcoran
Click for sound
the Premier Income and Premier Monthly Income Funds and is co-manager of Premier Optimum Income Fund.
Chris White joined Premier in November 2010 and has over 25 years of investment management experience. He manages
There are two options of this strategy available, Income and Monthly Income, the former distributing on a bi-annual basis. Both are managed along similar lines by seasoned investor Chris White. The underlying portfolio of each fund holds between 40 and 60 stocks, with White seeking to deliver a yield in excess of the FTSE All Share index by investing across the market-cap spectrum. Disclaimer »
A single UK equity income strategy that gives
investors a choice of two separate income options
“This is a no-nonsense equity income fund that to date has met its investment objective of providing a high level of dividends while growing the capital value in the long term. Chris’s sensible investment process makes this fund suitable as a core income proposition where investors can expect a higher dividend rate than the market without any surprises. The income is paid half yearly and those who prefer their distributions more frequently can elect to invest in the Premier Monthly Income Fund.”
Tony Yousefian_ senior consultant_ FundCalibre
Jake Moeller_ head of Lipper UK & Ireland Research_ Thomson Reuters Lipper
“With high levels of homogeneity in the equity income sector and the valuations of bond proxy stocks, Chris White’s faith in UK multi-cap stock-dividend discipline is compelling. Eschewing yield staples such as pharma and utilities, and ignoring the foreign currency translations potentially affecting larger-cap UK income stocks, his robust track record suggests positions in consumer discretionary, industrials and occasionally IPO’s can not only provide a decent durable yield but growth opportunities too.”
Benjamin Stoves_ investment analyst_ Rowan Dartington
"Chris White is a value manager, so the fund unsurprisingly holds far fewer defensive compounders than most in the sector. He’s backing some cyclical trends but it’s a measured bias, it’s not a deep recovery fund. It’s diversified by a number of slightly obscure thematic or stock-specific ideas that should give some variation of performance drivers. The outcome is a higher income stream than most peers and, more importantly, a consistent one."
Amy Waite_ investment analyst_ JLT Investment Management
"We use the Premier Income fund in the UK equity space for the consistent income it provides through its ‘plain vanilla’ approach. It also gives us diverse exposure to the UK market through its multi-cap strategy and high active share, while delivering below-average sector-relative volatility. We feel it does exactly what it says on the tin."
Premier Income
and Monthly
Income Funds
and market views together
Axis analyses the fund
strategy directly from the
from four perspectives to
bring you insight, research
fund manager himself.
with an explanation of the
Click for sound
John Monaghan, research manager,
Square Mile Investment
Consulting & Research
Chris White has managed this UK equity income fund since December 2010 with an aim of paying a half-yearly income in excess of 100% of the FTSE All-Share index. He does this by investing in a concentrated number of stocks across the cap size with a strong focus on generating attractive dividends.
Scroll down to read more...
There are two options of this strategy available, Income and Monthly Income, the former distributing on a bi-annual basis. Both are managed along similar lines by seasoned investor Chris White. The underlying portfolio of each fund holds between 40 and 60 stocks, with White seeking to deliver a yield in excess of the FTSE All Share index by investing across the market-cap spectrum.
Scroll down to read more...
Fund
size_
Source: FE Analytics
Data correct as of 24.04.2018
* Chris White has run fund since 01.12.2010
Transaction charges_
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Premier Income Fund
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Performance since
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Premier Income Fund: Distribution and yield
Source: FE Analytics
Income Fund data as at end of Q3 2017
Note: This relates to the fund’s A-share class
20
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FTSE All Share Yield
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10
Premier Income Fund: Distribution and yield
Premier Income & Monthly Income Funds - quarterly performance
Data from 1 Dec ’10 - 25 Apr ‘18
Source: FE Analytics
Jun ‘12
120
Dec
Jun ‘14
60
IA UK Equity Income
Jun ‘15
Jun ‘11
Jun ‘13
Jun ‘16
-20
80
Premier - Income
Jun ‘17
100
FTSE All Share
Dec ‘10
Premier - Monthly Income
Premier Income & Monthly Income Funds -
quarterly performance